Customs, Excise and Service Tax Appellate Tribunal

Mandev Tubes and Ors. v. C.C.E. & S. Tax, Vapi

MANU/CS/0097/2017

13.06.2017

Excise

Statement of person relied upon in confirming demand be allowed to be cross-examined

Appellants are engaged in manufacture of copper tubes and availed benefit of CENVAT credit on various inputs, including copper ingots. On basis of investigation by DGCEI, it was alleged that, Appellant during period May 2003 to April 2004, had wrongly availed credit of Rs. 40,99,008/- only on basis of input invoices without receiving goods mentioned against those invoices in their factory premises. Accordingly, Assessee was issued with a show cause notice for recovery of said inadmissible credit along with interest and penalty. On adjudication, demand was confirmed with interest and penalty. Aggrieved by said order, appeal was filed before Commissioner (Appeals), who in turn, rejected their appeals. Hence, present appeals.

Assessee-appellant has requested cross-examination of witnesses. Authorities below had denied cross-examination of said witness without any valid reason. Also, statements of said witnessed were relied and accepted by adjudicating authority in confirming proceeding against Appellant. In these circumstances, adjudicating authority ought to have allowed cross-examination of these witnesses and also should have afforded reasonable opportunity of hearing instead of giving three dates of hearing in one single letter.

It has been held in a series of cases including in case of Andaman Timber Industries vs. C.C.E., Kolkatta II MANU/SC/1250/2015
that, statement of person relied upon in confirming demand be allowed to be cross-examined. In result, impugned order is set aside and appeals are allowed by way of remand to adjudicating authority for deciding the issue afresh after allowing cross-examination witnesses, and affording reasonable opportunity of hearing to Appellant.

Relevant

Andaman Timber Industries vs. C.C.E., Kolkatta II MANU/SC/1250/2015
: 2015 (324) ELT 641 (SC)

Tags : Witnesses Cross-examination Demand Confirmation

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High Court of Bombay

Rajesh Chunilal Meghani Vs. The Andheri Recreation Club and Ors.

MANU/MH/1143/2017

12.06.2017

Civil

Consent of Charity Commissioner is necessary for institution of suit of nature specified in Section 50 of MPT Act

Challenge in present appeal is to impugned orders made by City Civil Court at Bombay rejecting plaint in Appellant's Suit under Order 7 Rule 11(d) of Code of Civil Procedure, 1908 (CPC). Cause of action as pleaded in suit is suspension or attempted suspension of Appellant from membership of Respondent No. 1, Club, which is admittedly a public trust registered under Maharashtra Public Trusts Act, 1950 (MPT Act). By impugned orders, Trial Judge has accepted case of Respondents that, reliefs applied for by Appellant stand covered under provisions of Section 50 of MPT Act and therefore, suit as instituted, without prior written consent of Charity Commissioner was not maintainable. Trial Judge, in impugned orders, has relied upon provisions contained in Sections 50, 51 and 80 of MPT Act, to hold that, Civil Court lacks jurisdiction to entertain a suit of such nature in absence of prior written consent of Charity Commissioner.

Appellant admits that, he is member of Respondent No. 1, which is a public trust registered under MPT Act. Besides, it is also case of Appellant that, Respondent No. 1 is a society registered under Societies Registration Act, 1860. Section 2(10) of MPT Act, defines expression "person having interest" to include, in case of a society registered under Societies Registration Act, 1860, any member of such society, and in case of any other public trust, any trustee or beneficiary. In terms of averments made by Appellant in plaint, it is clear that, Appellant, answers the definition of expression "person having interest".

Section 50 of MPT Act, makes provision for institution of suits, by or against or relating to public trust or others. It provides that, in any case, where direction of Court is deemed necessary for administration of any public trust, or for any declaration or injunction in favour of or against a public trust or trustee or trustees or beneficiary thereof, Charity Commissioner, after making such enquiry as he thinks necessary may himself institute a suit to obtain any of reliefs prescribed under section 50 of MPT Act. In alternate, two or more persons having an interest, in case the suit is under sub-clauses (i) to (iii), or one or more such persons in case, suit is under sub-clause (iv), having obtained consent in writing of Charity Commissioner, as provided in Section 51 of MPT Act, may institute a suit in Court within a local limits of whose jurisdiction whole or part of subject matter of trust is situate, again, to obtain a decree for any of reliefs specified in Section 50 of MPT Act.

Section 51 of MPT Act, provides that, if the persons having an interest in any public trust intend to file a suit of nature specified in Section 50, they shall apply to Charity Commissioner in writing for his consent. If Charity Commissioner after hearing parties and making such enquiries, if any, as he thinks fit is satisfied that, there is a prima facie case, he may within a period of six months from date on which application is made, grant or refuse his consent to institution of such suit. Order of Charity Commissioner refusing his consent shall be in writing and shall state reasons for refusal. As against refusal of consent, an appeal is provided to Divisional Commissioner. Section 51(3) of MPT Act, provides that, in every suit filed by persons having interest in any trust under Section 50, Charity Commissioner shall be a necessary party.

Section 50(4) of MPT Act, provides that subject to decision of Divisional Commissioner in appeal under Section 71, decision of Charity Commissioner under Section 50(1) shall be final and conclusive. Provisions of the MPT Act have been considered in great details by Supreme Court in Church of North India v. Lavajibhai Ratanjibhai and Ors.. Supreme Court has held that, MPT Act is a special law. It confers jurisdiction upon Charity Commissioner and other authorities named therein. Supreme Court has reiterated and followed the principles in Dhulabhai v. State of M.P., in matter of exclusion of jurisdiction of civil courts. It is held that, jurisdiction of civil courts would be excluded, if there is adequate remedy to do what civil courts would normally do in a civil suit. MPT Act, provides for express exclusion of jurisdiction of the civil court. Bar of jurisdiction created under Section 80 of MPT Act, clearly points out that, a third party cannot maintain a suit so as to avoid rigours of provisions of MPT Act.

In present case, Appellant, answers definition of expression "person having interest" under section 2(10) of the MPT Act. Appellant claims to be aggrieved by order/resolution of public trust suspending or purporting to suspend Appellant from position held by him with public trust. Reliefs applied for by Appellant in suit also stand covered by reliefs referred to in Section 50 of MPT Act. Admittedly, Appellant had not obtained prior consent from Charity Commissioner before institution of suit. Proviso to section 50 of MPT Act, in terms provides that, no suit claiming any of reliefs specified in Section 50 shall be instituted in respect of any public trust, except in conformity with the provisions thereof. Similarly, Section 51 of the MPT Act also provides that, consent of Charity Commissioner is necessary for institution of a suit of nature specified in Section 50 of MPT Act. There is no case made out to interfere with impugned order.

Further, Impugned order dated 26 February, 2016 is not clear. Once it is held that, suit as instituted by appellant is of nature as contemplated by Section 50 of MPT Act, there is no question of non-suiting Appellant by resort to provisions in Section 80 of MPT Act and holding that, there is bar of jurisdiction because question raised in suit is a question which, by or under MPT Act, to be decided or dealt with by any officer or authority under MPT Act and in respect of which, decision or order of such officer or authority has been made final and conclusive. Impugned order is set aside. Appellant is at liberty to apply to Charity Commissioner for permission to institute suit under Section 51 of MPT Act. Appeal partly allowed.

Relevant

Church of North India vs. Lavajibhai Ratanjibhai and Ors. MANU/SC/2531/2005
, Dhulabhai vs. State of M.P. -MANU/SC/0157/1968
: AIR 1969 SC 78

Tags : Suit Maintainability Adequate remedy

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Supreme Court

Narendra Soni and Ors. v. The State of Haryana and Ors.

MANU/SC/0675/2017

08.06.2017

Education

50% seats in Post Graduate Diploma Courses have to be offered to in-service doctors who have served three years in remote areas

Petitioners are in-service doctors who have applied for admission in Post Graduate Degree and Diploma Courses. Petitioners claimed that, having rendered service in remote and/or difficult areas, they are entitled for weightage as admissible under Regulation 9 of Post Graduate Medical Education Regulations, 2000. It is submitted that, earlier a list for remote and difficult areas was issued by State of Haryana on 05th May, 2017, which was challenged before High Court by filing a writ petition. Writ petition was allowed by Punjab and Haryana High Court against which order of State came in SLP, which after granting leave, was decided by this Court on 25th May, 2017. This Court affirmed order of High Court.

Petitioners in instant writ petition prays for Issuance of an appropriate writ, order or direction in nature of Certiorari quashing counselling process for MD/MS/PG Diploma held by Registrar, Pt. B.D. Sharma, University of Health Science, as unconstitutional being ultra vires of Articles 14 of Constitution of India. Further, for issuance of appropriate writ, order or direction directing Respondent, State Authorities to issue a Notification notifying remote and/or difficult areas in terms of Post Graduate Medical Education Regulations, 2000 framed by Medical Council of India and grant applicable weightage in marks while considering candidature of Petitioners for admission for MD/MS/PG Diploma in State of Haryana.

Regulation 9(IV) of the 2000 Regulation envisages a weightage to those in-service doctors who have rendered their services in difficult and/or remote areas, and Petitioners who have served in difficult and/or remote areas are being deprived of their statutory weightage due to inaction on part of State.

Reservation of seats in medical colleges/institutions for respective categories shall be as per applicable laws prevailing in States/Union Territories. An all India merit list as well as State-wise merit list of eligible candidates shall be prepared on basis of marks obtained in National Eligibility-cum-Entrance Test and candidates shall be admitted to Post-graduate courses from said merit list only: Provided that, in determining merit of candidates who are in-service of Government/public authority, weightage in marks may be given by Government/Competent Authority as an incentive at rate of 10% of marks obtained for each year of service in remote and/or difficult areas upto maximum of 30% of marks obtained in National Eligibility-cum-Entrance Test, remote and difficult areas shall be as defined by State Government/Competent Authority from time to time.

From judgment dated 25th May, 2017, it is clear that, State must issue a notification notifying remote and/or difficult area, if it intends to give weightage to Post Graduate Courses. Fact remains that, no fresh notification has been issued till date. Thus, there is no list available for State which can be utilised for giving weightage in Post Graduate Degree and Diploma Courses.

Regarding 50% of seats in Post Graduate Diploma Courses, Regulation 9(VII) mandates State to reserve 50% of seats in Post Graduate Diploma Courses for medical officers in Government service who have served for at least three years in remote and/or difficult areas. After acquiring PG Diploma, Medical Officers shall serve for two more years in remote and/or difficult areas as defined by State Government/Competent authority from time to time. Petitioners submits that, by just not acting, State cannot be allowed to violate mandatory provisions of Regulation 9(VII), and 50% seats in Post Graduate Diploma Courses have to be offered to in-service doctors who have completed three years. Object and purpose of giving 50% seats in Post Graduate Diploma Courses is to give incentive and encouragement to those in-service Doctors who have rendered their service in the remote and/or difficult areas. Fact further remains that, as on date, there is no list of difficult and/or remote areas which can be utilised for giving weightage.

Submission that, admission to Post Graduate Diploma Courses, on 50% posts, should be made on merit of in-service doctors who have completed three years service needs to be accepted. Apex Court further clarified that, only those candidates, under Regulation 9(VII), for against 50% seats, shall be considered who have given their application and obtained No Objection Certificate from State of Haryana. Candidates who have obtained No Objection Certificate, admission shall be made on basis of merit of NEET for 50% Diploma seats. Petition disposed off.

Tags : Counselling process Marks Weightage

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Customs, Excise and Service Tax Appellate Tribunal

Commissioner of Central Excise, Customs and Service Tax, Belgaum Vs. Zeenath Transport Company

MANU/CB/0085/2017

07.06.2017

Service Tax

Assessee is eligible for benefit under Section 80 of Finance Act, 1994, where service tax along with interest is paid before issue of show-cause notice

Present appeal has been filed by Revenue against impugned order passed by Commissioner whereby Commissioner has dropped penalty under Section 76, 77 and 78 of Finance Act, 1994, as Assessee has paid service tax liability along with interest. Respondent paid service tax and interest and same was appropriated by Commissioner. Further, Commissioner, relying upon Boards Circular No. 341/18/2004 : MANU/DSTX/0049/2004
dated 17th December, 2004, waived penalties invoking Section 80 of Finance Act, 1994.

Instruction in Boards Circular No. 341/18/2004 : MANU/DSTX/0049/2004
dated 17th December, 2004 provides that, in case of omission in payment of service tax or procedural lapses by persons liable to pay service tax on goods transport by road, committed before 31st December 2005, consequences should be limited to recovery of tax with interest payable thereon. No penalty should be imposed on such defaulters unless default is on account of deliberate fraud, collusion, suppression of facts or willful mis-statement or contraventions of provisions of service tax with intent to evade payment of service tax.

Commissioner in facts and circumstances of case has rightly given benefit of Section 80 of Act, and has not imposed penalties under Section 76, 77 & 78 of Act, because Respondent had paid service tax along with interest before issue of show-cause notice. Further, levy was newly introduced during relevant period involved in present case and even Department was not aware of statutory provisions and hence, department has demanded entire amount in show-cause notice without giving benefit of abatement as provided under Notification No. 32/2004-ST : MANU/DSTX/0046/2004
dated 3.12.2004.

Further, Division Bench of this Tribunal in case of S-Mac Security Services Pvt. Ltd. by relying upon decision of Karnataka High Court in case of Motor World has upheld benefit under Section 80 where service tax along with interest is paid before issue of show-cause notice. Therefore, there is no infirmity in impugned order and same is upheld by dismissing appeal of Revenue.

Relevant

S-Mac Security Services Pvt. Ltd. vs. CST : MANU/CB/0076/2016
: 2016 (45) STR 209 (Tri.-Bang.), CST, Bangalore vs. Motor World: MANU/KA/2705/2011

Tags : Penalty Dropping of Validity

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Customs, Excise and Service Tax Appellate Tribunal

Ess Ess Metals & Electricals Vs. CCE, Delhi-II

MANU/CE/0416/2017

07.06.2017

Excise

Demand cannot be sustained unless all relied documents have been furnished to Appellant to enable them to defend themselves

Appellant is engaged in manufacture of brass, zinc, nickel, tin and lead alloys falling under Tariff Subheading 74.03 of 1st schedule to Central Excise Tariff Act, 1985. Dispute pertains to the period 1st April, 1987 to 31st March, 1990. Show cause notice was issued for demand of Central Excise Duty amounting to Rs. 49,83,736/- along with a proposal for imposition of penalties under various rules as well as a proposal for confiscation of land, building, plant and machinery used in manufacture of excisable goods. Appellant was not discharging Central excise duty payable on goods viz. alloys of various nonferrous metals, by taking the view that, these metals as well as metal alloys remained classified in same tariff heading up to 13.5.1988 and hence, there can be no manufacture in conversion of metal into metal alloys. Revenue was of view that, conversion of non-ferrous metals into metal alloys would amount to manufacture in terms of Section 2(f) of Central Excise Act, 1944 both prior to 13th May, 1988 as well as for period subsequent thereto. Case was initially adjudicated by Commissioner in which Central excise duty demands stand confirmed. Impugned order stands passed by Commissioner in de novo proceedings in which duty demand as proposed in show cause notice stands confirmed along with penalty of Rs. 50 lakh under Rule 173Q.

Expression "manufacture" defined in Clause (f) of Section 2 of Act, includes any process incidental or ancillary to completion of a manufactured product; which is specified in relation to any goods in Section or Chapter notes of Schedule to Central Excise Tariff Act, 1985 as amounting to manufacture, and word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in production or manufacture of excisable, goods, but also any person who engages in their production or manufacture on his own account. It is thus clear that, "manufacture" includes any process under Section 2(f) of Act. As observed by this Court before more than four decades in Union of India & Another v. Delhi Cloth & General Mills Co. Ltd. & Ors., word "manufacture" is a verb which is generally understood to mean as "bringing into existence a new substance" and does not mean merely "to produce some change in a substance, however minor in consequence the change may be".

In Empire Industries Ltd. v. Union of India, it was held that taxable event under Excise Law is "manufacture". The moment there is transformation into a new commodity commercially distinct and separate commodity having its own character and name, whether be it the result of one process or several processes, "manufacture" takes place and liability to excise duty under Section 4 is attracted. In light of decision of Apex Court, there is no scope for argument that conversion of metal into alloys does not amount to manufacture. Central Excise duty is liable to be paid on finished product cleared from Appellant's factory.

It is a settled position of law that, demand cannot be sustained unless all relied upon documents have been furnished to Appellant to enable them to defend themselves fairly. Consequently, wherever relied upon documents have not been supplied to Appellant, demand of excise duty is liable to be set-aside. For this purpose, matter remanded to original adjudicating authority who will re-compute demand after excluding demands attributable to documents whose copies have not been made available to Appellant. On question of eligibility of Modvat credit, Apex Court's decision clearly lays down that, assessee will be entitled to Modvat benefits, if otherwise eligible. In de novo proceedings, adjudicating authority will extend benefit of Modvat credits subject to satisfaction of conditions to be fulfilled by Appellant in this regard. Appellant should be given an opportunity for putting forth their claim for Modvat credit supported by necessary documents. Similarly, benefit of SSI notification will also be allowed subject to fulfilling conditions specified therein. Charge of manufacture s upheld and matter remanded to adjudicating authority for re-quantification of demand.

Relevant

Union of India & Another v. Delhi Cloth & General Mills Co. Ltd. & Ors., MANU/SC/0245/1962
: (1963) Supp (1) SCR 586 : AIR 1963 SC 791, Empire Industries Ltd. v. Union of India, MANU/SC/0186/1985
: (1985) 3 SCC 314

Tags : Demand Confirmation Validity

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High Court of Calcutta

Soham Lal Manpuria and Ors. Vs. Kolkata Municipal Corporation and Ors.

MANU/WB/0391/2017

06.06.2017

Civil

No place other than municipal market shall be used as a market place unless such place has been licensed as a market by Municipal Commissioner

Present writ petition is filed for a direction upon corporation authorities to take steps for demolition of illegal construction and stoppage of illegal running of private market on lands of Petitioner. Subject matter of dispute discernable from writ petition pertains to firstly inaction on part of Municipal Commissioner to decide representation filed by Petitioners, and secondly, whether market established by market committee and constructions made thereupon is strictly inconformity with provisions of Kolkata Municipal Corporation Act, 1980.

Chapter XXIV of said Act contains exhaustive provisions relating to markets and slaughter houses. Said chapter imbibed within itself municipal markets and private markets. Section 428 of Act, clearly provides that, no place other than a municipal market shall be used as a market place unless such place has been licensed as a market by Municipal Commissioner under Section 436 of Act. Municipal licenses are dealt with under Chapter XXV. Section 435 of Act, thereof puts an embargo on any person to use any premises for any of non-residential purposes mentioned in Schedule V without municipal license granted by Municipal Commissioner. Though Article 19(1)(g) of Constitution of India, guarantees all citizens right to practice any profession or carry on any occupation, trade or business but same is not an absolute right which would be evident from Article 19(6) of Constitution.

Sections 437 and 438 of Act create an absolute prohibition against establishment and/or opening of market for public without valid license. It is therefore manifest from aforesaid provisions that, Municipal Commissioner has to form a conclusive opinion with precision and information whether such market is established in conformity with aforesaid provisions or not.

A plea has been taken by Corporation that, said market was established prior to inclusion of Jadavpur Municipality within Kolkata Municipal Corporation. No records pertaining to any permission granted by Jadavpur Municipality to establish and run market for public nor any document relating to sanction being granted for construction of shops or stalls are produced. If stand of Corporation is considered to be true and correct for sake of argument, yet it does not absolve Corporation from arriving at definite opinion on various provisions of Bengal Municipal Act, 1932. Chapter 17 of aforesaid Act contains somewhat similar provisions to Chapter XXIV and XXV of Kolkata Municipal Corporation Act. Identical prohibition is provided in aforesaid Act and therefore, illegalities cannot get cured and/or validated as said municipality is subsequently included in Corporation.

Section 626 of Kolkata Municipal Corporation Act, indicates that, the moment any area is included within periphery of Kolkata Municipal Corporation Act, which was earlier within limits of municipality, Municipal Act governing shall be admitted to be repealed and provisions of Acts, Rules and Regulations framed under Kolkata Municipal Act, 1980 shall apply except State Government by notification may otherwise direct.

Illegal acts under repealed Act does not automatically get validated and/or receive legal sanction as said Act stood repealed by virtue of inclusion of area within territorial limits of Kolkata Municipal Act, 1980. Municipal Commissioner is required to consider those aspects, more particularly the notification issued and published by State Government at time of inclusion of Jadavpur area within territorial circumference of Kolkata Municipal Corporation.

Municipal Commissioner is directed to consider representation and shall decide same after affording an opportunity of hearing to Petitioner and all interested persons, by recording proper reasons within 4 weeks from date of communication of this order. Petition disposed off.

Tags : Illegal construction Direction Demolition

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